Subject: File No. 4-557
From: Larry Gadbois

April 15, 2008

I am writing to support Petition 4-557.

A deterioration of enforcement by the SEC of the existing rules and regulations set forth in the Security Acts of 1933 and 1934, and the writing of new rules that allow deliberate violations are causing the largest threat to the United States of America since the Civil War.

We have entered into the age of electronic communications. It is understandable that the practice of eliminating unnecessary paper and paperwork does improve efficiency. However, many of the practices today in our financial markets have destroyed the honesty of those markets, and have placed the entire nation's monetary system in jeopardy.

I object to the fact that the SEC is actively authorizing market participants to redefine the term "Security" in customer accounts. Even with today's rapid electronic trading, the T+3 settlement period is necessary. However, the SEC has turned it's back on delivery fails that have gone on for weeks, months, and years. The SEC has even grand-fathered those fails in Reg SHO as if it is acceptable. Meanwhile, the customer has paid cash money for something that has not been delivered, and may not even exist.

The idea that Security Entitlements (which are no more than I.O.U.s) are credited to a customer's account after the settlement date rather than the securities that have been purchased gives the Broker/Dealer an unlawful opportunity to use the payment funds without ever buying the security. And the principle of Ex-clearing between Broker/Dealers allows further I.O.U.s to be used, particularly in the stock "locate and borrow" program.

As long as we are talking of the stock "borrow program", I am against the adoption of Rule 10b-21. The rule as crafted is way off base. The retail investor is not to be blamed for the failures of the Broker/Dealer to locate and borrow shares when a security is sold short. Before the transaction is processed, the Broker/Dealer that is handling the exchange of the security is totally responsible for handling the locate and borrow.

The SEC has also failed to monitor and regulate the Options Market Makers as they use their exception to create and sell shares of stock that were never issued by the corporation. The result is that the legal float of stock on a high percentage of companies traded on the U.S. stock exchanges has been diluted through the inflated volume, resulting in a theft of the stock's value to the legal stockholders. Without further delay, the OMM exception should be eliminated.

The up-tick rule should be restored. It was in effect for over 70 years, and was helpful in reducing the severity of "bear raids" on targeted companies. Between the loss of this rule, and the ability of a large investment group to buy "synthetic shares" in the market, many companies large and small have been driven into bankruptcy in the last ten years through continued and unlimited short attacks.

Section 6 (b)(5) of the Securities Exchange Act of 1934 prohibits discrimination between investors. We all have a right to equal treatment in the market place. Yet, the actions of the SEC have given favor to the Broker/Dealers by failing to enforce the Security Acts of 1933 and 1934, and to write new regulations that violate the principles that have been set down and approved by the United States Congress. And recently you have proposed giving more authority to the Federal Reserve to regulate and enforce the nation's equity markets. I don't believe that giving the Banking and Brokerage community total powers to self-regulate is in the best interest of the people of our nation. If you can't enforce the laws of the land, who will?